The joy of income: that’s what it’s all about in retirement. The day that you retire and step over that threshold, you no longer have earned income. Instead, you’re going into a spending phase of life. Several recent studies have shown that retirees with a guaranteed income stream are actually happier than those without one. As the number one fear of retirees is running out of money before running out of life, this makes sense.

The ability to create dependable, increasing income in retirement increases happiness and allows retirees the confidence level to really live the way they want to in retirement. You want to have a high probability that you won’t outlive your income. It’s not about the amount of assets you have, it’s not about your “retirement number” … it’s how much dependable, increasing income can you generate and how do you go about doing that.

Therefore, you need an income plan where you’re not depending on risk assets for your income. The income plan – not only how much income can you draw, but where do you draw it from – is the most overlooked area in retirement planning.

With an income plan, you plan for market volatility before it happens. Part of that is determining your risk tolerance, while the other part of it is determining your income need: how much money you’re going to need and when will you need it. Don’t overlook this critical component because more stability of income provides for a happier retirement.